1. ninth edition
STEPHEN P. ROBBINS MARY COULTER
Chapter
Social Responsibility
5 and Managerial Ethics
Instructor: Zhengxin
Lingnan College, Sun Yat-Sen University
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2. Current stories about companies being
socially irresponsible
The Tainted Sanlu Baby Milk Powder Incident
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3. China starts probe into baby powder milk contamination as more cases
reported (2008-09-12)
Two babies with kidney stones receive medical treatment at a military
hospital in Lanzhou, capital of northwest China's Gansu Province
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4. China reports 432 infants with kidney stones, production of Sanlu halted;
Stores in China pull contaminated milk powder off shelves (2008-09-12);
Zhang Yujun, who produced and sold melamine-laced "protein
powder" in the China tainted milk scandal, was convicted of
endangering public security and sentenced to death by a local court.
(2009-01-22)
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5. What Is Social Responsibility?
• The Classical View
 Management’s only social responsibility is to
maximize profits (create a financial return) by
operating the business in the best interests of the
stockholders (owners of the corporation).
 Expending the firm’s resources on doing “social good”
unjustifiably increases costs that lower profits to the
owners and raises prices to consumers.
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6. What Is Social Responsibility? (cont’d)
• The Socioeconomic View
 Management’s social responsibility goes beyond
making profits to include protecting and improving
society’s welfare.
 Corporations are not independent entities responsible
only to stockholders.
 Firms have a moral responsibility to larger society to
become involved in social, legal, and political issues.
 “To do the right thing”
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7. • What are the reasons for corporations taking
(not taking) social responsibility ?
• List at least five reasons
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8. Exhibit 5–2 Arguments For and Against Social Responsibility
• For • Against
 Public expectations  Violation of profit
 Long-run profits maximization
 Ethical obligation  Dilution of purpose
 Public image  Costs
 Better environment  Too much power
 Discouragement of further  Lack of skills
governmental regulation  Lack of accountability
 Balance of responsibility
and power
 Stockholder interests
 Possession of resources
 Superiority of prevention
over cure
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9. Does Social Responsibility Pay?
• Studies appear to show a positive relationship
between social involvement and the economic
performance of firms.
• A general conclusion is that a firm’s social
actions do not harm its long-term performance.
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10. • VALUES-BASED MANAGEMENT
An approach to managing in which managers
establish and uphold an organization’s shared
values.
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11. • The Purposes of Shared Values
 Guiding managerial decisions
 Shaping employee behavior
 Influencing the direction of marketing efforts
 Building team spirit
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12. Exhibit 5–7 Survey of Stated Percentage of
Values of Core Value Respondents
Organizations Customer satisfaction 77%
Ethics/integrity 76%
Accountability 61%
Respect for others 59%
Open communication 51%
Profitability 49%
Teamwork 47%
Innovation/change 47%
Continuous learning 43%
Positive work environment 42%
Diversity 41%
Community service 38%
Trust 37%
Social responsibility 33%
Security/safety 33%
Empowerment 32%
Employee job satisfaction 31%
Have fun 24%
© 2007 Corporate Values Survey,” (www.amanet.org), October 30, 2002.
Source: “AMA
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13. Managerial Ethics
• Ethics Defined
 Principles, values, and beliefs that define what is right
and wrong behavior.
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14. Three domains of human action
Domain Domain Domain
of codified law of ethics of free choice
(Legal (Social (Personal
standard) standard) standard)
High Amount of Explicit Control Low
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15. Small case I: Management Ethics
Dilemma
• A top employee at your small company tells you he
needs some time off because he has AIDS. You know
the employee needs the job as well as the health
insurance benefits. Providing health insurance has
already stretched the company’s budget, and this will
send premiums through the roof.
You recently read of a case in which federal courts
upheld the right of an employer to modify health
plans by putting a cap on AIDS benefits. Should you
investigate whether this is a legal possibility for your
company?
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16. Small case II: Management Ethics Dilemma
• As a sales manager for a major pharmaceuticals
company, you’ve been asked to promote a new drug
that costs $2500 per dose. You’ve read the reports
saying the drug is only 1 percent more effective than
an alternate drug that costs less than one-fourth as
much. Can you in good conscience aggressively
promote the $2500-per-dose drug? It you don’t, could
lives be lost that might have been saved with that 1
percent increase in effectiveness?
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17. Exhibit 5–8 Factors That Affect Ethical and Unethical Behavior
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18. Ethics in an International Context
• Ethical standards are not universal.
 Social and cultural differences determine acceptable
behaviors.
• Foreign Corrupt Practices Act
 Makes it illegal to corrupt a foreign official yet “token”
payments to officials are permissible when doing so is
an accepted practice in that country.
• The Global Compact
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19. How Managers Can Improve Ethical
Behavior in An Organization
1. Hire individuals with high ethical standards.
2. Establish codes of ethics and decision rules.
3. Lead by example.
4. Set realistic job goals and include ethics in
performance appraisals.
5. Provide ethics training.
6. Conduct independent social audits.
7. Provide support for individuals facing ethical
dilemmas.
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20. An Sample:
Code of Ethics
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21. Awareness of Social Issues
• Social Entrepreneurs
 Are individuals or organizations who seek out
opportunities to improve society by using practical,
innovative, and sustainable approaches.
 Want to make the world a better place and have a
driving passion to make that happen.
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22. Terms to Know
• classical view • ethics
• socioeconomic view • values
• ego strength
• social obligation • locus of control
• social responsiveness
• social responsibility • code of ethics
• whistle-blower
• social screening • social entrepreneur
• greening of management • social impact
• values-based management
management
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23. LEARNING OUTLINE
Follow this Learning Outline as you read and study this chapter.
What is Social Responsibility?
• Contrast the classical and socioeconomic views of social
responsibility.
• Discuss the role that stakeholders play in the four stages
of social responsibility.
• Differentiate between social obligation, social
responsiveness, and social responsibility.
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24. LEARNING OUTLINE
Follow this Learning Outline as you read and study this chapter.
Social Responsibility and Economic Performance
• Explain what research studies have shown about the
relationship between an organization’s social involvement
and its economic performance.
• Define social screening.
• Explain what conclusion can be reached regarding social
responsibility and economic performance.
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25. L E A R N I N G O U T L I N E (cont’d)
Follow this Learning Outline as you read and study this chapter.
The Greening of Management
• Describe how organizations can go green.
• Relate the approaches to being green to the concepts of
social obligation, social responsiveness, and social
responsibility.
Values-Based Management
• Discuss what purposes shared values serve.
• Describe the relationship of values-based management to
ethics.
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26. L E A R N I N G O U T L I N E (cont’d)
Follow this Learning Outline as you read and study this chapter.
Managerial Ethics
• Discuss the factors that affect ethical and unethical
behavior.
• Describe the important roles managers play in
encouraging ethical behavior.
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27. L E A R N I N G O U T L I N E (cont’d)
Follow this Learning Outline as you read and study this chapter.
Social Responsibility and Ethics in Today’s World
• Explain why ethical leadership is important.
• Discuss how managers and organizations can protect
employees who raise ethical issues or concerns.
• Explain what role social entrepreneurs play.
• Describe social impact management.
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28. Homework
1. Reading: Book chapter 5
1 paper essay covering the key points of social
responsibility and managerial ethics.
2. Movie watch <Outsourced>
http://v.youku.com/v_playlist/f2364608o1p0.html
1 paper essay talking about the global
outsourcing and management issues in the
movie.
Due time: 30th, Oct., Friday before class.
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